InsurTech Newsflash: Bought By Many
January 17, 2017 Chris Sandilands
Bought By Many has just announced a £7.5m investment from Octopus Ventures and Munich Re’s HSB Ventures arm and existing investors.
Bought By Many is arguably the UK’s leading InsurTech business. It started life in 2012 as a group buying proposition, originally with a solvency 2 risk diversification angle for insurers. The latter was dropped pretty quickly and it is now focused squarely on improving the customer experience for insurance buyers and now has over 250,000 “members” (more on that later).
Members are people who have signed up (for free) to one of Bought By Many’s “groups”. Groups are for people with specific insurance needs – travel insurance for cancer survivors or pet insurance for pugs (because pugs are special!), or model railway enthusiasts.
Groups are set up based on market insight from proprietary software that has analysed many hundreds of thousands of insurance-related Google search terms. Once a group has sufficient members, Bought By Many goes out to insurers to arrange an insurance product. Members are acquired through social media marketing (primarily Facebook), where Bought By Many has an expert team.
The trouble that Bought By Many found over the last four years is that they’ve lacked the scale to persuade insurers to build products for them – a major technological and cultural challenge for many of them. As a result, their pretty front end process often fell down when leads had to be passed over to insurers’ own quote and buy systems, leading to depressed conversion rates.
The Munich Re Digital Partners partnership solves this. It will allow Bought By Many to offer a seamless customer journey. MRDP’s innovative proposition (which Oxbow Partners helped to design and build) facilitates digital interaction with disruptive startup distributors – and has attracted several prominent InsurTechs such as Trov and Slice.
Oxbow Partners analysis
Bought By Many has a strong management team, led by Steven Mendel (CEO) and Guy Farley (CTO). They have built strong foundations over the last four years, both strategically and technologically. This is a business, not bluster.
The number to watch will be how members convert to customers. The company only discloses its member numbers – those who have joined groups. Conversion rates are a closely-guarded secret but are the primary driver of value for the business.
The MRDP partnership is a bet on the fact that the company can really drive this number when it is in control of product. We assume that this will have a big impact: Bought By Many acquired a broker specialised on exotic pets and pet businesses, Brooks Braithwaite, in 2015 and we have to assume that this data provided validation for the investment thesis. That will drive the first wave of growth.
But only time will tell how big the ultimate addressable market is. As Rob Moffatt of Balderton Capital wrote in a recent comment in an Oxbow Partners blog, there is a “battle between two schools of thought on insurance: The first is minimising the thought users need to give to it (Knip etc.), the second is trying to get people to care more about insurance (Trov etc.)”. This is interesting for Bought By Many – is it just pug owners who care about the alignment of their insurance policy, or can this personalisation trend go mainstream?